PAW PAW -- Assets of a former multimillion-dollar racing-fuel empire that is now under federal tax investigation are scheduled to be auctioned Nov. 10 to raise cash to help satisfy burgeoning debts, according to a filing in Van Buren County Circuit Court.

A court document filed this week by Foley and Lewis Racing Inc. says "there will be an auction of General Sales' assets on Nov. 10, 2008."

But details are sketchy because a court order laying out the future of Decatur-based businesses owned by Evan W. Knoll has been sealed by Van Buren County Circuit Judge William Buhl in an agreement reached by parties in one bank's attempt to recover $15 million it loaned Knoll to purchase a private jet.

General Sales and Service is the parent company for a group of Decatur businesses Knoll owns, including Torco Racing Fuels, a top drag racing fuel producer/supplier; a retail propane company; and Knoll Gas, a gasoline station/convenience store.
Buhl declined to comment Thursday on the contents of the sealed order, saying only that the parties had sought to keep it private. No signs advertising an auction were posted Thursday at Knoll's Decatur business locations.

Mark Bugnaski | Kalamazoo Gazette fileEvan Knoll of Decatur is seen in a file image taken at U.S. 131 Martin Motorsports Park. Knoll is a defendant in three federal lawsuits involving his Decatur-based company, Knoll Gas-Torco Racing Fuels.

Another Van Buren County judge previously ordered a receiver to file weekly reports on the financial and operating status of the business. However, the latest receiver report in court files is dated Sept. 8.

Buhl said he was unaware that the receiver has not submitted the reports.

Meanwhile, records show at least three more creditors have filed circuit court actions to put them in line to recover money they claim Knoll or his businesses owe. They are American Express, which claims Knoll defaulted on a $1.3 million credit card bill; Fifth Third Bank, which is seeking to recoup a $170,000 unpaid loan; and Foley and Lewis Racing Inc., a drag racing team that alleges Knoll failed to pay $1.2 million in sponsorship fees.

It is uncertain how much any of the creditors will recover if the Internal Revenue Service determines that Knoll's businesses owe the government tens of millions of dollars.

Neither Knoll nor his companies have been charged with any crimes.
The IRS began to question millions of dollars of gasoline-excise-tax refunds the company was collecting from the government.

The Decatur firm said it paid the excise tax on each gallon of fuel it purchased from suppliers. When Torco reformulated the product for use as high-octane racing fuel, it claimed a refund for those taxes because the fuel was not being used for on-road purposes.

The IRS initially questioned whether Torco should have been able to claim the tax rebates, according to IRS documents filed by Chase Equipment Leasing Inc. as part of its claim against Knoll's companies. Since then, the IRS has also asked Torco to provide documents proving it purchased the volume of fuel for which it was claiming the rebates, according to court filings.

The IRS has alleged Knoll has failed to provide additional documentation the agency has requested for quarterly tax rebates Torco claimed since 2005, according to court records. Most of those rebates, ranging from $1 million to $9 million per quarter, were paid to Torco by the government.

But records show the IRS held up a $9.6 million rebate claimed by Torco in late 2007.
Chase filed a lawsuit in June saying it loaned Knoll $15 million to purchase an airplane, based largely on assets that included the excise tax rebates.

Knoll responded to that suit in July, claiming his signature was forged on loan documents.

However, in an affidavit of William G. Wright, a Kalamazoo-area auto dealer who is described in court records as a business associate to Knoll, Wright says he witnessed Knoll signing the papers. The affidavit was filed by Chase on Sept. 11.